National Real Estate Exam Prep Study Questions and Answers Graded A 2024

Unilateral Contract - Contract containing ONE promise given in exchange for completing an act. NO obligation to act. Bilateral Contract - Contract containing TWO promises. Example: A listing agreement is a bilateral contract Client/Principal - A person who has entered into an agency relationship w/ a licensee & with whom there is a written contract Customer - Any 3rd party w/ whom a licensee works In-Company Transaction - Transaction in which the buyer and seller are both represented by the same brokerage. Management-Level License - A licensee who is employed by or affiliated w/ a brokerage who has supervisory responsibility over other licensees. Statute of Frauds requires the following: - 1) Certain contracts be in writing to be enforceable, 2) All real estate contracts for the sale of LAND & ALL LEASES for more than one year, options for more than 6 months, must be in writing & signed by all parties. Novation - Substituting a new obligation for an old one. Also, a transfer of rights and/or duties under contract. If the original party to an agreement is replaced due to novation, are they liable? - No Mailbox Rule - Acceptance that becomes effective as soon as it is sent in the mail, unless the contract specified a certain means for delivery. Grantor is the - Owner Grantee is the - Buyer Optionor is the - Seller Optionee is the - Buyer Lessor is the - Landlord Lessee is the - Tenant Vendor is the - Seller Vendee is the - Buyer Mortgagor is the - Buyer Mortgagee is the - Lender Trustor is the - Buyer Trustee is the - 3rd Party to the transaction Regulation Z dictates - Disclosure Requirements in Credit Transactions, including the disclosure of the Annual Percentage Rate (APR) Regulation Z applies to: - ALL REAL ESTATE credit transactions except for commercial loans. For non-real estate transactions, it covers up to $25,000. The Cooling Off Period is a condition of: - Regulation Z. It gives the customer the right to rescind the transaction for up to 3 business days following the transaction for liens placed on a principal residence. RESPA stands for - Real Estate Settlement Procedures Act RESPA requirements include: - 1) Lenders must give borrowers a good faith estimate of closing costs. 2) Lenders must give borrowers a HUD booklet describing closing costs, settlement procedures & borrowers rights. 3) Closing agent must prepare a HUD stmt detailing how much was paid to what companies for what services 4) Borrower must be given right to inspect HUD stmt 1 day before close. 5) Lenders & other parties must give full disclosure of all business relationships. 6) Lender must disclose to borrower if the loan is likely to be sold to another investor. RESPA prohibits: - 1) Kickbacks & fees for services not performed in connection w/ the closing 2) It limits the amount of escrow reserves a lender can hold 3) The sale may not be on the condition on the use of a certain title co or escrow co. chosen by the seller. Annexation is - the act of bringing something or putting something on the land. When determining annexation, value of the item is RARELY considered. The RELATIONSHIP if the parties is more important.